tv Your Money CNN July 25, 2010 3:00pm-4:00pm EDT
disabilities, what everybody wants is a hand up, not a handout. >> reporter: and for ryan's father and many others, it's about common decency. >> i think there are many stereotypes we battle today, i think there are derogatory terms still used for people with cognitive and intellect disabilities. and understand that individuals like ryan have hopes and dreams and aspirations just like the rest of us. >> reporter: keira phillips, cnn. coming up in the 4:00 eastern hour, we'll hear from a young woman trying to get into the country to go to college. she's had no luck even though she was raised here in the u.s. and graduated from an american high school. but first, time for "your money." the most sweeping overhaul of the financial system since the great depression is now the law of the land. welcome to "your money." i'm ali velsh.
christine is off this week. democrats gave the president what he wanted and a few republicans helped out, too. but could these policy victories ultimately cost the congressional democrat the mid-term elections in the fall? let's bring in the most political team on television. candy crowley, chief political correspondent and host of "state of the union." ed henry, or senior white house correspondent and paul stalter, our direpolitical director. senator mitch mcconnell, this is his take on president obama's policies and achievements so far. listen to this. >> job cycling taxes, regulations, government intrusion. these appear to be the three pillars of every democratic legislative effort. they are also the three things lawmakers can do that are guaranteed to kill more jobs.
>> candy, let's start with you. when you think about it, you think of stimulus, you think of health care reform, you think of regulation reform. they all fall into the money guide, but now it's the politics of how this will play out. democrats will play this as major victories keeping their promises, and you can see how republicans are going to play this out. what's going to happen with mid-term votes? are they going to go with the democratic line or the republican line? >> well, i think probably you won't find anyone that will tell you that the democrats will gain seats or even keep the seats they have. this is a mid-term election. mid-term elections are always a referendum on the party in power, and that's the democrat. the question here is, will they lose a couple of seats, some seats, or will they really get wiped out? that's where they're going. let's face it, the democrats have no choice but to say, hey, look what we did. what is their pitch now? their pitch is things would be a
lot worse if we hadn't done what we did. i suspect reform will be a lot more popular. democrats will lose their seats, the question is the quantity. >> this will be the main theme of the election. this economy started to turn at the end of 2007 and the beginning of 2008. paul, it's 2.5 years later, and the economy remains the biggest issue. how are voters? how are the people that we're polling rating the obama administration on the economy? >> not so well, ali, take a look at this. this is a brand new scene on the national poll, and we asked just that, do you approve or disapprove how the president is handling this? you can see a majority disapproves of how the president is handling the issue. take a look at this, we broke it down by party. democrats, of course, support the president. republicans, of course, do not give a president the thumbs up on the economy. what about those important independent voters? only a third of those give the president a thumbs up on the
economy. they went with the president and the democrats in 2008. that helped them make big gains. if they squeeze them this time around, they could be in big trouble, ali. >> the president is hovering in the same spot for a while. but he's not running for congress. what do members of congress that are running for election in november, what do they want from the president? >> they want him to raise money, they want him to get out there more in the stump. that's why we've seen some pressure in recent days from house democrats in particular that think they've crushed that have not really won a lot of republican votes. they now want the president to get out and vote. top aides say he will do more campaigning in the coming dasz, but you see right now, for example, health care reform was vags vastly unpopular a few months
ago. it's starting to become more popular. people get pushed away from the scare scenarios and start looking at the benefits. wall street is hoping that will happen with wall street reform. they think over time it will get better. the problem, though, is it may not come around quick enough to help congressional democrats in november but might come around to help the president in 2012. that's a big divide behind the scenes among democrats who fear this white house may be throwing them under the bus in the short term, and the president will get reelected in 2012 as some of these big bills start reaping benefits for him down the road. >> this is an interesting point. candy, the president isn't running until 2012 again. what's the long-term fallout from whatever happens in the mid-term election from the president? if the democrats lose even a few seats and lose control of one or both houses of congress, is that good or bad for the president? >> well, you could make a case looking back at bill clinton's administration, that it might be
just fine for him. bill clinton's mid-term elections got clocked and he lost quite a few seats, but he was able to then use the republican controlled congress as kind of a foil for his reelection. well, they won't let me do anything and look what they've tried to do, so you've got something to fight against, something to be compared against. the white house will tell you that's not so, that they really want a democratic house and a democratic senate. part of that is the president's second half of his first term has to have an agenda, and it's going to be a heck of a lot easier to get that agenda through if you have democrats. so if you're a cynic, you would say the president could have someone to play against. in the end, he'll deal with what he's got, and either way, i think he could use it to his benefit. >> candy, when you look at these major pieces of legislation, at least two of them, health care reform and financial regulatory reform, would not have passed
without democratic leadership in the house and the senate. there are some people who supported the president. republicans largely didn't on both of those things. paul, you're a polling guy. our polling cat ining indicates people are very dissatisfied with congress, more than they are with the president, but they don't all hate their own member of congress. what does polling say about incumbents and their chance for reelection? >> when you ask that generic question, would you vote for the republican or democrat in your district, right now the democrats are slightly behind the republicans. usually people like their incumbent a little more. throw the bums out in congress overall. your guy not a bum, but those numbers are lower than they've ever been, even going back to 1994 when there was that wholesale change in congress. chances you are invested in
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but get used to them. you'll see them as we head into mid-term election. ed henry, our chief political correspondent, candy crowley, which is also host of "face the nation" and our deputy political editor paul steinhauser. paul, you manage our polling at cnn. we've got new polls out right now and i want to get a sense of how realistic people are about voting in the upcoming mid-term elections. what's your sense of it? >> this is a real good indicator, i think, ali, for how it will go in november. how would the voting go right now for the republicans and democrats? you can see the republicans are more enthusiastic. they want to get out there, they want to vote. democrats not nearly as much. we've seen that number pretty much stay that way all year and it could be troubling for the democrats if the numbers stay that way in november, ali. >> ed, you're around the president all the time.
his campaign and his election can really be characterized by excitement. what happened to all that excitement surrounding the election of president obama and why is he not, either by choice or not, drumming up that kind of enthusiasm leading up to the mid-term elections, or is it too soon to say? >> you could probably boil it down to one word: governing. governing is not as easy as campaigning is. when you're out there, you're a rock star, you're this new brand. once barack obama was elected president, all those campaign promises, liberals wanted to cash in on various things that are not so popular in the center of the country. i think the enthusiasm gap, they're hoping here at the white house, will be closed once the president gets out there more on the road, once bill clinton, they're planning to deploy him, the former president gets out there, they think they can bank on some enthusiasm, and sort of behind the big picture numbers
is that you noted people don't trust the president, don't have faith in the president in some of these numbers, but they have even less faith in congress. when you dig down deeper, they have the least faith in republicans in congress, and the white house believes that's because republicans haven't put up a lot of alternatives to their plans on health care or wall street reform. they're trying to paint the republicans as the party in the know and basically saying you can't get something for nothing, and they're hoping here in the white house that over the next three months or so, they can convince the american people they've taken some tough choices, the democrats, some tough votes, but at least they stood up to try to reform some things, fix this economy, et cetera. we'll see if that works. >> candy, let's go back to election time 2008, this time in 2008. if people, when they're running, ask if they would vote for barack obama at this time in 2008. we're certainly not much more certain about the economy and
there were more people employed back then. whose economy is this? if it's not fixed, does president obama get to blame the bush administration republicans, or is this wholly his problem now? >> it's not wholly his problem because we do see in the polling that people still believe this was started by george bush. however, it is very difficult for this president and for these democrats to go into an election with two big numbers. 9.5% unemployment and history-making mortgage foreclosure rates. if you take those two things together, those are the two things people really get. if they're not unemployed and they haven't lost their house, they're scared they might be unemployed and they might lose their house. those are two very gut-wrenching figures. people look at it and say, well, there's many more people that are unemployed. well, yes, but they're worried about their jobs. so i think those are two figures that really dog the democrats as
they move into these elections, and while people may blame george bush for the explosion, as they see it, of this recession, they certainly expected the stimulus to produce more jobs than it has so far. >> let me ask you this, paul. of the three major legislative victories of this legislation, i want to put them apart, but health care and financial regulatory reform, the response by americans to both of those pieces of legislation are very different, according to the polls that you brought us. >> brand new polls, again, as a national survey. we asked, do you support the increased federal regulation over the banks and the financial institutions which i guess is the heart and soul of this brand new law, and you can see six in ten americans do support it. there is a partisan divide there, ali, but they're in favor of the democrats and in favor of the financial reform bill. what about health care? there has been an uptake in
support, but it looks like americans are still pretty much right now divided on this. about half the country basically wants to repeal the law and start anew. if you take a look at those bottom numbers, it equals 50% and that 50% kind of likes it. >> candy, on this show we dig deeper on some of the issues that the network covers when it comes to money. on your show, you dig deeper into issues on politics. >> one of the things we want to take a 6,000-seat view on is the presidency. the agriculture department and the firing and the retaking of the firing and that kind of stuff, but we want to look@what it means, and the pressures that are on the first african-american if the, look, do something about the divide in this country.
that's great but we'll all be talking about the economy. sdp >> candy crowley, host of "state of the union," ed henry, senior white house correspondent for us. they're all talking about financial reform. it is the law the land. government officials hope they have the power to prevent another economic meltdown. do they have the guts to do what it takes? i'm going to talk about that when we come back. they go thror and truck we make with a big fat red pencil. because they know a family's going to be inside. a teenager. a guy on the way to the job. the engineers of chevrolet. just another reason why we can offer a 5-year 100,000 mile powertrain warranty. and another reason why a chevy's a chevy.
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-so you're thinking...? i agree. preferred. only meineke has options... and now 50% off brake pads and shoes. my money. my choice. my meineke. you might have missed it with all the shirley sherrod stuff going on in the last week, but the big news out of washington is that financial reform is now the law of the land. what can you expect this massive bill to do for you today and next year and in the next three years? lex harris, a good friend of mine is money manager of cnn.com. that's where we get so much of our business intelligence from. let's talk about this financial reform overhaul and what it is supposed to accomplish. in broad strokes, what is it supposed to do?
>> well, basically after the worst financial crisis since the great depression, congress got to work and said, we have to head this off at the pass, and if something should happen again, make it less severe. >> one of the things everybody wanted to associate this bill with was this idea of putting an end to things being too big to fail. does this reform bill actually do that? >> well, you know, right out of the gate they have a lot more power than they used to have. and already you're hearing critics saying, oh, they went soft, but make no mistake, they have more power. at the heart of it is a new something like an attack team that can go out and search out the biggest, ugliest messes out there, and if they see fit, can do something about it, can actually bust them up. >> so what a lot of people had expected out of this bill was that it would somehow minimize risk or take risk out of the banking system. i guess you can't take all the risk out of the banking system,
but what has this bill done on that front? >> they really clamped down. to the extent that banks in the run-up to the crisis were making big bets on weird real estate securities that no one knew exactly what they were doing, they limit how big the bets can be, and one of the provisions we're most hopeful for is that it brings derivatives trading so some of the most risky things out in the open so they have to trade it and people can see what they're doing. >> is this the most effective consumer protection? what does it do? >> it's hard to put your finger on what it's going to be because it all about getting the right person in place. there will be this new chief regulator. there is about to be a fight over who it's going to be, and some of the provisions we think would be really good, there will be so much ruling involved before we get to what those provisions are, so it's going to take some time. just the fact there is someone
looking out for consumers where there hadn't been i think is a big step forward. >> lex is one of those guys on the team, by the way. when we find out how we're going to cover a story here on cnn, he's the backbone. if you follow that web site carefully, you really will find everything you want to know about money. another story you'll see is goldman sachs paying a hefty fine to the fcc. it's the biggest fine in the sec's history. but is the bank really paying the price for what it did, or is it getting off easy? we'll check it out after this. you know, when i grow up, i'm going to own my own restaurant. i want to be a volunteer firefighter.
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julia is the u.s. managing editor for the financial times. matt, before this firm was ever charnl charged, you wrote a remarkable piece on goldman sachs. these are your words. the most powerful investment bank is is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. what do you think of the settlement, matt? >> it's too small. it's the largest settlement in sec history, which is something, but let's be real. this is a tiny fraction, even, of what goldman posted for profits in the first quarter this year. so it's -- you know, it fits in with the general pattern of wall street companies being fined amounts significantly less than they made from the illegal activity, and they're also always allowed to get off without any admission of criminal wrongdoing and nobody
here was dragged off in manicals and it was really a signal to wall street that they can go back to business as usual. >> julia, for us less legal minds, we tend to think if there are fines imposed or legal fees imposed, there are compensatory issues. is $550 million for a company that made more than that in one quarter, does it achieve either of those goals? >> unfortunately, not really, because to anyone outside wall street, $550 million sounds like a big sum, but the reality is it's a very small fraction of what they make in any one year. and, unfortunately, because they didn't actually have any admission of liability, there was no accusation in the end of fraud, in many ways they have got off. there is still a chance of litigation, but as far as goldman is concerned, the whole
thing is a pretty good trade, to use wall street jargon. >> matt, let me ask you about this. let's talk about back in 200 on, 2001, when there was that whole other spate with enron. you saw someone being arrested, you saw court cases and things like this. we're not seeing that virtually anywhere in this financial crisis. there have been a couple people who have been charged with criminal offenses at other companies, but largely, this has escaped the law. >> yeah. i mean, that's a major factor you hear. ambrose pierce once said a corporation is a major price of obtaining individual profit without individual liability. these guys are doing these things, and if the om thing happening is their company's account is going to be debited,
there is no end here. until we see these guys getting charchled on tv, we're going to keep seeing this kind of fraud. >> we haven't seen a trial that found anybody guilty of anything. gillian, let's talk about this financial reform bill, which would have been the big thing in the news this week if not for the diversion of shirley sherrod getting fired, and that's what everyone in washington was concentrating on. this financial regulatory reform bill. good for banks on wall street, bad for banks on wall street, which one? >> it's a bit of a mixed bag, to be honest. the banks have learned enough in the last few months to know they shouldn't come out and say, this is terrible, terrible, we're not going to cooperate. they're trying to put the best spin on it. there are often battles they've won, there are battles they've
lost. the important thing is there are not fights that are over yet. right now you've got a lot of lobbyists gearing up to try and get involved in that rule-making process. it moves out of the hands of the politician and see into the hands of the regulators in the coming months, and the devil is going to be in the detail of how that law is written and what it means to banks. >> according to the center for responsive politics, there are about 1,000 lobbyists involved in this whole thing at one point and about $600 million has been spent lobbying this bill. matt, that sort of figure would seem to be quite offensive. many lobbyists say they're there for a reason and they're the liaison between the community and wall street, but gillian has a good point c. these are broad strokes in this litigation. it remains to be seen if this
will change anything on the ground. do you think it will? >> look, there are good things in this bill. because of this bill, there will be an audit of the feds for the first time ever. there will be changes in the lending standards for mortgages, there will be a creation of the new financial protection agency to help predatory lending. there is good stuff in the bill, there is no denying that. but the big ticket items, the stuff that really would have stopped the crisis the last time around, the stuff that would have addressed the fraud, too big to fail, derivatives. almost all those measures are either rejected outright or watered down to mere meaninglessness. i think wall street feels it dodged a bullet with this bill. they're going to complain and say it's an onerous view of speculations, but i think in reality, they're going to be pleased they didn't get off much worse with this bill. >> gillian, let me ask you this. if you go back to 2007 and 2008, are there provisions at the moment in this bill that would
prevent the financial crisis we wen through from happening again? >> we still have to see where financial reform is going to end up. until we actually see how the rules are written, remember, it's a 3,000-page bill. it's complex. we don't know how things will look. unfortunately, many of the products that were at the center of the financial crisis, all these complex bundles of mortgage-backed securities, they wouldn't be forced onto any public strangers. and there will still be opportunity for the banks to run the rules if they want. however, what the bill does do is give the regulator some power to clamp down going forward on the central banks as well. but that's a lot of work for lobbyists to be busy with in the coming months. >> as i discussed earlier, whether they're willing to use the power remains to be seen.
gillian, good to see you, matt, contributing editor of "rolling stone." we'll check in with you two again as we see how those rules are shaping up. you are in vsed in a mutual fund. that's how most americans invested in retirement do it. do you sell them? do you buy more? do you stay away from it or do you do more? i'll tell you more when we come back. ♪ band: how many credit cards ♪ is too many credit cards? ♪ he's guessing seven cards probably are ♪ ♪ 'cause now his credit score s seriously poor ♪ ♪ he won't be able to afford a house or car ♪ ♪ so he's working for the man ♪ to pay off all he can ♪ and to see how he's doing ♪ this is the site he's using: ♪ free-credit-score-dot-com! free-credit-score-dot-com! ♪ ♪ free-credit-score-dot-com! vo:offer applies with enrollment in triple advantage.
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mutual fund investors are watching this market with one key question. where are we headed? we're talking about you. most americans who invest for retirement generally speaking use mutual funds. they're safer, they're easier to manage instead of investing in stocks. is it doesn't mean it's necessarily going to happen and it doesn't mean the stock market is not without opportunities if you know how to take advantage of them and you know how to look. my friend christine benz is back. these the author of "the 30-minute money solutions."
christine, for viewers primarily focused on mutual funds, what do you think? is it too dangerous to be invested? >> i would say it's a time for opportunity, but you really do have to have that stock bond cash blueprint that you've plotted out, so you need to be in the right allocation before you can go ahead and pick securities. but i do think there are some potential opportunities. >> and that is not hard to find out what your allocation should be. you can do that by talking to your adviser, do that by reading your book, go on the web site. you answer some questions and roughly you get the feeling for how much should be in stocks, how much should be in bonds, how much should be in cash, but you can achieve all of that through mutual funds. >> you can. so that's the starting point and you need to go out there and do your homework. it's an interesting time in that high-quality stocks, quality appears to be relatively cheap, certainly according to our stock
analyst team, so that's somewhat reassuring. >> if we don't grow ourselves out of this place that we're at well enough, if we don't grow fast enough or, some people talk about a double dip recession, mainly because of what's going on in europe, in other words, if ye we're not going gangbus terz in the economy, what pofts are likely to hold up during an off year? >> once you go into bonds, you look to companies who can sell their wares no matter what's going on. people are going to buy toilet paper, they're going to take their medicine no matter what's going on in an economy, so you want to look at probable cause ter -- procter & gamble, places like that. >> we've got a bill now that means more people are going to have to consume health care so they're going to continue selling what they make. >> right, so that's a relatively
stable area. the other end of the spectrum would be some of the industrial companies, so you would want to downplay them if you were looking to be active. sdp >> so you can base it on an industry or whatever the case may be, you don't want to just get into any mutual fund. there are specific things that morning star allows you to do. what should the average person, other than buying a mutual fund and knowing what's in the mutual fund, what should we be evaluating. >> you want to see how it's picking stocks, if it's an industry fund or exchange traded fund, who method it's use to go assemble the index it's tracking. so strategy is the key. you also want to focus on expenses, and ail, we harp on this a lot, but we crunch the numbers looking for those data points that will help you predict good and bad fund performers.
the more we do this, the more data lines up behind expenses being a highly predictive factor, so costs are definitely key when shopping for funds. >> she's the director of finance at morning star, also the author of "30 minute money solutions." coming up next, why that next bottle of soda could deliver an extra pop to your wallet depending on where you live. [ children laughing ] suitcase? huh? ♪ where do gummy bears hide? under the seat. look! yeah! ♪ [ telephone rings ] [ male announcer ] the all new chevy equinox. [ man ] guess who? dad! [ man ] enjoy the trip! okay, daddy! [ laughter ] [ male announcer ] a consumers digest best buy. with a 100,000 mile powertrain warranty. it takes you farther... and brings you closer. with ♪ 100,000 mile powertrain warranty.
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back with us is contributing editor of "rolling stone" and stephen smith. once again cracking down on the influence of money in the college game. a number of universities are under fire. player agents once again at the center of the storm. it is against the rules for these players and their families to receive cash and gifts, but should it be. stephen, why can't college football and basketball players get paid for their skills the same way other school officials are? >> what they're going to say is
you can't play all student athletes. yes, there is a lot of money coming in. yes, there are hundreds of millions of dollars or multi-billion-dollar television contracts to take into consideration, but they're going to tell you there's title 9, other athletes that contribute to sports, they need to be paid. they're going to talk about the sanktity, they're going to throw that into the equation. a stipend of some sort when you consider the money, the billions of dollars that are being generated in college sports, the fact these kids aren't receiving some kind of financial benefit while the coaches themselves, the administrators and institutions are all getting paid and getting paid lovely, i
think it's an absolute disgrace. >> matt, you got a view on this? >> i totally agree. it's a scam that allows the universities to make millions of dollars off poor kids. these kids don't even get a real education most of the time because they spend nine and ten hours a day in some cases in the football programs. you get a scholarship, you get a free education, but the reality is these kids who played a division i sport don't get a real education when they leave. >> do they get a chance at making big money if they go pro afterwards? >> well, a lot of times they do, but sometimes they don't. by and large, most athletes who compete in college sports aren't going to the next level. they're just not going to do that. the elite go to the next level. sometimes there's a few scrubs. look at the nba.
there's a few scrubs in the nbc. we don't have to mention any names, but the people who know basketball know that exists. by and large, the people who make it to the next level can really perform at a high level and that's why they make it. the rest of the people are left by the wayside. you have the institutions sitting around and saying, we give you a full ride, we give you a scholarship, and that should be enough. the thing about it is it may have been enough at one point in time, but clearly, as the institutions will show and prove, it wasn't enough for them to continue to go out and collect more money for themselves, so why can't that be spread down to the athletes themselves? it just seems to make sense and it seems to be fair. >> let's talk about something else. soda. i drink a lot, pop, whatever you want to call it. i'm trying to defeat my effort to get to 300 pounds as quickly as possible, so i'm drinking the kind that doesn't have sugar in it. but with the states trying to
slash their budgets, raising taxes seems to be it. you can see why they're seeing green on this one. soda is big business. $18.7 billion in sales over the past year. soda tax may push consumers to lower calorie options. it may help states fill their budget gaps, but if i want my sugar fix, is this somewhere the government should be vold? i guess my bigger question is, if you're going to take money out of my bad eating and drinking habits, are we narrowing the field too much by targeting sodas when there are many ways i can get fat and unhealthy? >> i think it's appropriate in some cases, cigarettes, gasoline, but the thing that's really weird about soda taxes is the federal government spends about $4 billion a year on corn subsidies and a lot of that goes
to the development of high fructose corn syrup which goes to sodas. so the government is actually subsidizing the creation of soda and then it's going to tax us for dripging soda at the same time. if they wanted to even it out, they could just eliminate the corn syrup and get their tax money that way. >> i think he's right but i think he also needs to recognize that that's the government being hypocritical and why should you be surprised at that at all? any time i hear the word tax, i get scared because i think that's a disincentive for people to hire, i think it's incentive to lay people off because you're not generating the layer of revenue you once generated. so i'm saying maybe it's not such a good idea. but i'm seeing a localit of peo walk around very unhealthy, the obesity rate, we don't even have time to get into that. since we are on a mission to have a healthier society, i don't have too much of a problem
with it because it's a choice. it's not you necessarily saying i'm going to take your money in taxes no matter what. you're saying i will do so if you continue bad eating and drinking habits. >> matt, what's interesting is that many of the companies that make these sodas have seen the call for healthier so at least maybe there's a bit of a societal shift, who knows. one u.s. car company is doing something no car company has done in a big way before. you can be part of it without even buying a car. i'm going to tell you about it, when we come back. but first, in this week's turn-around, alan chernoff brings us the story of a nonprofit touring company in new york city facing its biggest cash crunch in 18 years. if you happen to be staying, i know in the center of the world. >> i know. joe anna and her husband are trying to change the way people see new york city. today's agenda? showing the canadian couple the brooklyn bridge and downtown manhattan. >> this city constantly
changing. >> the couple are volunteers for big apple greeters. a program that matches locals with out of towners for an insider's peek at the city. >> big apple greeters, how are you? >> the program is thriving, but its finances are no the lynn brooks founded the company 18 years ago to combat the city's negative image. she says times have never been tougher. >> the recession really has put us at a critical juncture of perhaps going out of business. we are now trying to raise $300,000 by september. >> if the money does not come through, what happens to the greeters program? >> well, if the money doesn't come through, ultimately we go out of business. >> big apple greeter has been slashing costs. chopping salaries. printing on both sides of paper. mailing postcards instead of
letters and asking visitors for donations before they tour with their greeter. >> big apple greeter is barely scraping by. but there's still hope. >> we're working really hard on all fronts to find the angel who might be interested in keeping this program alive. >> for joannas the real value of big apple greeters is something that can't be measured. >> these people are going back to canada and they're going to tell all of their friends and neighbors who said, you're going to new york? weren't you afraid? and they're going to go back and say, you know what, there's nothing to be afraid of. >> for canadians their trip to new york yielded more than postcards and photo opes. >> i don't think we could have experienced again with just a guidebook. i feel like we made two new friends. >> alan chernoff, cnn, new york. ... one time over the course of your term. try us at allybank.com.
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you can follow me at the official ali velshi facebook page. announced this week it has hit the 500 million mark, 500 million use he is, which makes it a valuable place for companies. with hundred of millions of eyes on the screen, one major american company, ford, has chosen facebook as the place to launch its campaign for its brand-new 2011 ford explorer. instead of an auto show unveiling. is this a turning point for social networking and major corporations? ford is not what you think of as the mess of american auto companies. this company just turned in a $2.7 billion profit in the last quarter. that's three months. that's the best results in six years. it's the fourth straight quarterly profit for ford. they're coming out with the hybrid, lincoln mkz this fall. so ford is an interesting ford-thinking company. so let's start with you, matt.
you know, are we sort of at the point where social media is a game-changer for the way companies sell and market? are we not quite there yet? >> first of all, i've got to ask, is ford an advertiser on this channel? >> no, i'm a big, big, i'm a big fan. you know, i'm a big fan of that company because when everything else was going south, this was a company that didn't take public money and managed to do the right thing. we blame those companies that took the public money. and squandered the public trust, this is one that didn't. >> clearly, you know, social networking sites and all this new media, this is the future for everybody. which is bad news for people like me, because print media is going to be dead within three years. so you know forks me this is bad news, but clearly, think this is where everything is going. >> first of all, he's engaged in some hyperbole, matt taibbi is one of the best in the business. but you have to give respect to
ford where respect is due. they didn't take any government money, the reality is, they give you some inclination that they know what they're doing. it doesn't seem like this is the greatest idea in the world. on face value. certainly you're going to get eyes looking at it. but as somebody who has purchased a car in the past, i want to see it in person, i want to sit in it i want to see how the leather seats feel. i want to see those things. so seeing it online, on facebook is not going to do the trick for me. but eyes are eyes. >> go back to a few years, when they started selling cars on the internet. it allowed everybody to find the price of the cars and compare them on the internet and ultimately, everybody who bought a car still went to the dealer. but the game-changer, i know people who have bought cars for tens of thousands of dollars, site unseen, on ebai. >> this is for people that are looking for a deal. this is entirely different than
ebay. when you're going on ebay, you're looking for a big-time bargain. i just got an explorer the other day from a girl and let me tell you something right now, it was considerably cheaper because i spotted it on ebay. that had a lot to do with it, ali. you've got to look for the bargains. >> matt, i always think about this, around christmas time when i see all of these stores trying to do something that makes them seem cool or get on to social media. i definitely had the impression until now that social media is great place to target and market to people. but we're not shopping through it just yet. >> but that's coming. it's not a coincidence that sol of the largest internet companies have plunged enormous amounts of money in social networking businesses. they were not making money for anybody for a long time. but it will. they're gathering, it's not just a way to reach eyes and ears. it's a way to gather enormous amounts of information about the people using those size. >> as reporters, we're gather information from it, too. guys, what a pleasure to